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The Winners and Losers of the Zero-Sum Game
Found this paper by Lawrence Harris, The Winners and Losers of the Zero-Sum Game.It seems interesting, but it's old and I don't have enough wisdom to know if it's true or just one guy's view. Anyone with more experience have opinions on this paper?
The Winners and Losers of the Zero-Sum Game
It is just "one guy's view", but not exactly a randomly chosen guy. Larry probably had more influence on US security market regulation in the immediate pre-Dodd-Frank era than just about anybody else, and this paper gives some pretty good clues to his way of thinking. The discussion of electronic trading is obviously hopelessly dated, but the underlying economic story he is telling is pretty compelling (and entirely readable).
The Winners and Losers of the Zero-Sum Game
If you like this paper, you may also like Larry Harris: Trading and Exchanges: Market Microstructure for Practitioners (2002), a book which follows a similar conceptual framework. In fact the 1993 paper reads almost like a first draft of a part of the book. [Unfortunately the book, being 9 years old, is also somewhat out of date with respect to electronic trading].
Last edited by acastaldo on February 19th, 2011, 11:00 pm, edited 1 time in total.
The Winners and Losers of the Zero-Sum Game
Thanks acastaldo and bearish. I ordered the Trading and Exchanges book, looks good.Any recommendations for up-to-date books or papers on electronic trading along similar lines?
The Winners and Losers of the Zero-Sum Game
I got the book and have been reading it. It's excellent, lots of good insight into how markets actually work and who all the participants are and why they do the things they do. Based on my own very limited understanding, the book is surprisingly applicable to electronic trading and high-frequency trading; the technologies change but the game remains the same.Looking for recent thoughts by Harris I found a segment on his views on the flash crash and dark pools.